The Respondents Submissions

The case basically deals with the violation of SEBI

Insider Training Regulations by the Appellant.
As per the Appellant, the shares were not purchased on
the basis of price sensitive information.
It is basically done for corporate benefit.
Shares were not purchased for personal gain.

FACTS: In Jan 1996, Bayer took over the Styrenics business of

Mosanto.
In Feb 1996, Bayer approached ABS for merger.
On 28th June, 1996 ABS considered the prospects of
foreign collaboration.
In July, 1996 Bayer visited ABS for its technical and
financial evaluation.
On 5th and 6th Sept, 1996 Appellant visited Germany and
held meetings with Bayer.

Contd
They concluded on in principle agreement.
On 20th Sept, 1996 the board was informed of the
Appellants visit to Germany.
On 29th Sept, 1996 the Appellant once again visited
Germany with his Legal Advisors.
On 2nd and 3rd Oct, 1996 legal consultants of both the
companies worked out to draft an agreement
On 8th Oct, 1996 Bayer purchased 20% shares of ABS at
Rs. 70/- per share which was raised to Rs. 80/- per
share.

Contd
Appellant admitted having instructed Mr. Kedia to
purchase shares of ABS.
He also gave reasons as to why he advised Mr. Kedia
about the purchase.
He financed the purchases of ABS shares only for
purpose of ensuring the Bayers pre-conditions of
merger was met.
Appellant ensured that all of this was done not for
personal gain but for corporate benefit.

Contd
Profit is not an element of the offence of Insider Training.
Profit made on the sale of shares to Bayer at the open offer
was Rs. 34,00,000/ Appellant has made the profit of 34 Lakhs on the 1,82,500
shares purchased.
Apart from this, Appellant was to continue as the Director of
ABS Industries.
He also had the privileged of holding 26% of the share capital.
Therefore, the maintained that the said purchases was for
personal gain.